INTERNAL HARD DISK 160 GB PURCHASE FOR COMPUTER BY PARTY
IS IT CAPITAL EXPENDITURE OR REVENUE EXPENDITURE????????
REPLY ME FAST....................
4 Replies
Saurabh Maheshwari
(B.com,ACA)
(5923 Points)
Replied 21 August 2012
Its capital expenditure..because it will form part of Block of computers
ramcharan
(articled assistent)
(367 Points)
Replied 12 September 2012
As per AS-10 thae expenditure can only be capitalised when the expenditure increases the life of the asset beyond the life of asset
beyond the life of the asset: Life of asset means the expected life of asset when we bought the asset,
for example:we bought asset on 1st april 2000 we expected that asset life as 5 years
then in 2003 we met some expenditure on the afforesaid asset the expenditure increases the life of asset(that means beyond 5 years from the date on which expenditure is incurred) otherwise treat it as revenue expenditure.
Bhaskar Unnikrishnan CPA CMA
(Accounts / Administration)
(414 Points)
Replied 12 September 2012
Hi Ramcharan, I think the priciple allows to capitalize the expenditure when it increase the efficiency of fixed asset as well (Not only Life).
ramcharan
(articled assistent)
(367 Points)
Replied 12 September 2012
Yes exactly I missed out that point in my reply, that too when it increases beyond the instaalled capacity
and thank you Mr.Bhasker
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